Let There Be Gas: Putin & Merkel Gave Trump the Finger

Russian and German Foreign Ministers Sergey Lavrov and Heiko Maas have removed any doubts about the prospect of completing the largest Russian-European energy project, Nord Stream 2. Although previously, they arose in the light of unprecedented threats from the United States against more than 100 European companies, officials, and even an entire port in the Baltic Sea cooperating with Gazprom in the implementation of the project.

At the conclusion of the first face-to-face talks between the Russian and German Foreign Ministers since the beginning of the pandemic in Moscow on Tuesday, an upbeat Lavrov announced at a joint press conference with Maas: Nord Stream 2 will be implemented. Russian, German, and other participants are determined to complete the project and “there is reason to believe that this will be done in the very near future”. The Russian Foreign Minister stressed:

We appreciate Berlin’s position, its principled position in support of this exclusively commercial initiative, which will help diversify natural gas supply routes and strengthen Europe’s energy security on the basis of the assessments that Europe and European countries themselves make, and not on the basis of assessments that are made from overseas.

Noting the “unprecedented sanctions pressure coming from the United States” that European participants of the project were subjected to, Lavrov said: “We can clearly see how Washington operates in the international arena, not being shy to use any methods, which is confirmed by the situation around the Nord Stream-2.” Without recognising “any red lines, any boundaries”, the US pursues “without any diplomatic staging, only one goal: to be able and entitled to do whatever they want in global politics and in the global economy,” the Russian Minister stated.

The German Foreign Minister, for his part, pointed out that Germany has the sovereign right to decide where it gets its energy, and “no country has the right to interfere” in this issue. The US, he stressed, “does not have the right to dictate the EU’s energy policy, and it will not work”. Maas said that “sanctions between partners” is “the wrong way”, noting that he had discussed this issue with US Secretary of State Mike Pompeo.

During the German presidency of the EU Council, which started on July 1st and will last six months, Berlin will be particularly active in defending European sovereignty, the German Minister assured.

It is obvious that Maas’s words are also a “response” to Washington for the visit of Secretary of State Pompeo to Europe on August 11th-15th, who plans to visit Prague and Plzen (Czech Republic), Ljubljana (Slovenia), Vienna (Austria), and Warsaw (Poland), ostentatiously bypassing Berlin to discuss, according to the Russian branch of “Voice of America”, “economic and geopolitical competition with Russia and China in Europe”.

Better late than never

The decisive statements made by the German Foreign Minister were very timely, because it seemed to some that the Americans had started to achieve their goals. Especially after the German energy company Uniper – one of the European partners of “Nord Stream 2” – said that due to the expected new US sanctions, the project may be delayed or not completed at all, although only 160 kilometres of pipes remain to be laid along the bottom of the Baltic Sea, and Russia is ready to complete the construction on its own.

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The risk of failure of the “Nord Stream 2” project is still considered the main individual risk for Uniper. If the project is ultimately not completed, Uniper may have to write off the loan provided to “Nord Stream 2” and lose the expected interest income, the company said.

At the end of May, Uniper financed “Nord Stream 2” for €700 million, and in total it was supposed to provide €950 million. The good news for it is that it will definitely not lose its investment now; the bad news is that it has hurried and damaged its image with an unjustifiable attitude of capitulation.

Moreover, the European Union, which is preparing a “communique on measures to strengthen the financial and economic sovereignty of the EU”, also intends to resist. According to EU Ambassador to Russia Markus Ederer, this document “will lay the foundation for a strengthened sanctions mechanism, which will also increase the EU’s resilience to the effects of extraterritorial sanctions of third countries”.

By “third countries” he means, of course, the United States. The EU’s attempt to create such a mechanism to protect European companies that cooperated with Iran from American threats actually failed. Brussels will not survive another failure in conditions when the stakes have risen immeasurably without catastrophic damage to its reputation.

As an organ of German business circles, the newspaper Handelsblatt, rightly noted, “Europe is facing a dilemma from which there is no elegant way out”. And if so, the key EU countries need to realise their interests without looking back at the US, following the example of the same Americans who, demanding from the Europeans to curtail energy cooperation with Russia, themselves bought from it a record amount of oil – 9.1 million tons in the first half of the year 2020, which is 2.3 times more than last year.

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This has put the US in 2nd place in the world among the countries that import Russian oil. And for some reason, no one hears in this regard angry tirades from Washington that the funds raised by Russia for this are used for the needs of its army and navy, “aggression” against Ukraine, and so on.

The Americans continue to exert pressure

That is precisely why the Bundestag’s Economy and Energy Committee called on the German government to “resolutely rebuff” Washington, which continues to exert pressure. Pompeo, for example, recently confirmed:

The Department of State is updating the public guidance for CAATSA authorities to include Nord Stream 2 and the second line of TurkStream 2. This action puts investments or other activities that are related to these Russian energy export pipelines at risk of U.S. sanctions.

According to the US Secretary of State, this is a “clear warning” to those foreign companies that provide assistance to “Russian” projects.

What this means in practice has been previously demonstrated by three US senators led by Republican Ted Cruz, who overwhelmed European companies involved in the project, as well as officials of the German port city of Sassnitz, the logistics base of “Nord Stream 2”, with letters threatening to ruin them and make them outlaws.

The Trump administration is closely monitoring whether these threats, which caused shock and indignation among the Germans, will work against the background of the US’ withdrawal of half its troops from Germany, which was framed by the Trump administration as “punishment” for the Germans’ obstinacy. Although, in fact, this American occupation has decreased by half. Moreover, the statements made on Tuesday in Moscow by Lavrov and Maas were, of course, a big blow for Washington: it is not possible to frighten Berlin, but it is very much possible to push Germany into the arms of Russia.

Why did the Germans pluck up the courage?

It only remains to answer the most interesting question – why did Germany decide to challenge Washington? There are many reasons for this, but there are several main ones.

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Firstly, Germany cannot submit to the US without jeopardising its status as the informal leader of the EU, especially when France has laid claim to this role.

Secondly, the Germans do not want to create a dangerous precedent for US’ forceful diktat in the economy. Because if the Americans manage to impose themselves as a supplier of expensive liquefied gas, which will undermine the competitiveness of German industry, then the next threats of the Trump administration will be directed at German car exports to the US, French agriculture, and so on. And then the Americans will start to demand to buy their nightmarish GMO food…

Thirdly, the Germans are simply defending their billion-dollar investment in “Nord Stream 2”, which will go to waste if it fails, as well as their future role as the gas hub of half of Europe. Moreover, Russian pipelines and gas storage facilities can be used for transporting and storing hydrogen, which is of great importance in German energy planning.

One last thing

Germany is certainly tired of the Trump administration’s brash, arrogant style, and it also understands that now is the right time to defend “Nord Stream 2”. After all, if President Trump, to the delight of the Germans and not only, loses the November election in the US, the new Democratic administration – at least in defiance of the Republicans, but also for a number of other good reasons – is unlikely to insist on curtailing this project, in connection with which Berlin only needs to hold out for a few months. The Germans are well aware that if they “surrender” this project now, they will never return it. Moreover, in conditions when the Democrats, in pursuit of the environment and continuing the course of the de-industrialisation of the US, will not be able to provide the Germans with sufficient volumes of liquefied gas. And what then will Germany do?

That is why Germany has plucked up the courage to challenge the Americans – with the help of Russia. A long-standing Anglo-Saxon nightmare starts to come true – when Russia and Germany find themselves on the same side. History shows that if both countries work together, they do very well, and they can do more.

Sergey Latyshev

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